INTENSIVE CARE FOR ROMNEYCARE

February 26, 2007

When then-Massachusetts Gov. Mitt Romney introduced a universal health-insurance plan last year, it was widely acclaimed. But less than a year after its passage, RomneyCare is in the intensive care unit, says Sally C. Pipes, president and CEO of the Pacific Research Institute.

Consider:

Last August, officials projected that the new plan would increase state government health-care spending by $276.4 million in 2007, $151 million more than what the public had originally been told the plan would cost.

In January, when private insurers submitted bids to the bureaucracy that would administer the new program, the average premium for the unsubsidized plans was not $200 per month -- as Romney promised -- but rather $380.

That's more than 15 percent of the target audiences' income -- and for a plan with a $2,000 deductible and a total cost sharing of $5,000.

There's a slim chance that the new Democratic governor Deval Patrick and the Democratic legislature will implement this plan and enforce the mandate. But if they do, an individual with a $30,000 income would be responsible for paying 32 percent of his or her income before being fully covered by insurance. Yet there is an equally small chance that the politicians will deregulate the state's insurance market.

Deregulation may be tough; however, as new officials continue dictating health-insurance design by creating the standards for Minimum Creditable Coverage (MCC), which individuals must meet to avoid paying a fine, says Pipes. If these standards are implemented, they would render illegal roughly 200,000 high-deductible policies currently in force -- exactly the sort of insurance that makes sense for the self-employed and young individuals.